March 17, 2019

March 17, 2019

The article was updated on March 18 with more information on projected revenue from L.A. Unified's proposed parcel tax.

Confident that a new Democratic supermajority in the California Legislature will back them, two state senators are proposing to ask voters in 2020 to make it easier for school district voters to pass a parcel tax. Unwilling to await that outcome, Los Angeles Unified school board members are confident they can persuade their voters to pass an ambitious parcel tax now.

For several years, Bay Area Sen. Jerry Hill, D-San Mateo and Sen. Ben Allen, D-Santa Monica, have been looking for an opportunity to lower the threshold needed to pass a parcel tax. It’s now a two-thirds majority; they want to drop it to 55 percent — the same that it takes for voters to approve a school construction bond. But either the political timing has been off or they were just a vote or two shy of the two-thirds support required in the Legislature to put a constitutional amendment on a statewide November 2020 ballot, where it would then need only a simple majority to pass.

But with the November 2018 election providing enough Democrats — 28 of the 40-member Senate and 61 out of 80 in the Assembly — to overcome expected Republican opposition, Hill and Sen. Ben Allen, D-Santa Monica, are moving forward with Senate Constitutional Amendment 5, to establish 55 percent as the new majority.

“We need to have more opportunity to raise revenue for decent education,” Hill said. “Despite significant increases in state funding for schools in recent years, districts are struggling to maintain quality educational services and programs amid escalating costs and declining enrollment.”

A parcel tax is one of the few sources of tax revenue available to school districts. But, in line with Proposition 13’s strict limitations on raising property taxes, a parcel tax must have a flat dollar amount or a uniform rate, regardless of the value of the property or the owner’s ability to pay. That makes the tax regressive, like the sales tax.

The bill would require a school board’s approval before a parcel tax could go on a local ballot and revenue could be used only for the specified purposes listed on the ballot description. The bill is silent on sharing revenue with charter schools whose students reside in the district. That would be a local decision.

About 1 in 8 school districts in California have passed parcel taxes, mostly in the Bay Area. Most parcel taxes are under $200 per year, usually with an exemption for senior citizens. But some districts, including Berkeley and Alameda Unified, use a more progressive variation and charge by the square footage of habitable buildings. That alternative brings in substantially more money from commercial properties, industrial properties and multi-unit housing.

And that’s the option the Los Angeles Unified school board chose when it voted last month to put a 12-year parcel tax at 16 cents per square foot on the June 4 ballot.

Hill called the two-thirds majority requirement undemocratic, giving too much power to a minority of voters. Lowering the threshold would give non-affluent districts a better chance to bring in more revenue.

Emma Turner, president of the La Mesa-Spring Valley School District and new president of the California School Boards Association, said “it makes no sense to place arbitrary restrictions on local communities seeking to provide needed resources for their students” given the state’s “woefully inadequate” funding. And she agreed with Hill that a lower threshold “dramatically increases the likelihood that less affluent districts and districts with high proportions of African-American and Latino students will pass a parcel tax,” she said in a statement.

An analysis by Michael Coleman, the creator of California Local Government Finance Almanac, an online resource of data and analyses, found that the lower threshold would significantly increase chances of passage. Since 2002, 266 of 427 proposed parcel taxes in the state passed; an undetermined number were parcel tax renewals. Many of those that failed had come within a percentage or two of the 66.7 percent required. If the threshold had been 55 percent, 91 percent — 389 of 427 — would have passed. What is not known, however, is how many districts wanted to propose a parcel tax but backed out because of low polling numbers.

Of the 26 school parcel taxes on the ballot in the past two years, 21 got the required two-thirds majority but all received more than 55 percent of the vote.

Impact of L.A. teachers strike

Hill said that widespread community sympathy for recent teacher strikes in Los Angeles and Oakland sent a message to the Legislature that people want more money for schools. In moving quickly to put a parcel tax on the ballot, Los Angeles Unified Superintendent Austin Beutner and the school board are betting that the surge of public support for the strike will carry over to June. Pollster John Fairbank, principal of the firm FM3 Research, told the board he was confident it would.

In his surveys of Los Angeles Unified voters dating back to 2002, at least 70 percent said they believed there was a need for more funding for the district. In 2010, in the midst of the recession, the school board put a $100 parcel tax on the ballot, but, with a poorly financed campaign, it lost handily, with 53 percent support. The difference this time, Fairbanks concluded, is that a record 62 percent of voters indicated a great need for more money and an additional 20 percent saw some need for it in a survey in February. That correlated with the 85 percent who said they strongly backed the strike.

Asked about the specific 16 cents per square foot tax, about 75 percent of voters polled said they’d back it. But subtract the 6 percent of undecided voters leaning yes and the level falls dangerously close to the 66.7 percent needed to pass.

The parcel tax, which will appear as Measure EE on the ballot, is projected to raise $400 million to $500 million per year, starting in 2019-20 — a record amount for a California parcel tax. It would meet the district’s projected shortfall in the final year of a 3-year contract that the school board negotiated in January with striking teachers. The money would be needed to cover many of the nurses, counselors and teachers needed to reduce class sizes. Charter schools would be entitled to a proportional share of the revenue.

United Teachers Los Angeles will help get out the vote in what will likely be a low turnout, off-year election. And Los Angeles Mayor Eric Garcetti, who negotiated the teachers’ contract assuming more state and local revenue, is expected to help fundraise for a credible campaign. He was one of five signers of the official ballot argument for Measure EE, which the Los Angeles County Registrar-Recorder/County Clerk released on Monday.

But for a first-time parcel tax, this size tax is ambitious, especially for a big, diverse district. The median tax would be $235 for an owner of a 1,450-square-foot home. Most homeowners would pay between $100 and $450 annually, according to an analysis by Garcetti’s office.

Industrial, commercial and multi-unit residential properties would generate a little less than two-thirds of the revenue from the 16-cent-per-square-foot parcel tax, with single-family owned and rented properties about a third, with institutional properties making up the difference. Under a flat $537-per-parcel tax, the other option the board considered to raise $500 million, the burden would have shifted to single-family owned and rental properties. They would have generated nearly three-quarters of the revenue from the tax, with industrial, commercial and multi-unit residential properties generating only a quarter, according to L.A. Unified projections.

The influential L.A. Area Chamber of Commerce supported the option of a flat-rate parcel tax, but criticized the choice of a per-square-foot tax as “inconsistent with our principles on singling out the business community and commercial enterprises.” The chamber board has yet to vote on specifically what it will do next.

But a well-funded opposition campaign would likely defeat the proposed property tax. Whether the business community campaigns against the tax — or simply takes no position — could determine its fate.

A good indication of what to expect will come by March 25, the last day for opponents to file ballot arguments against the parcel tax.

Comments Policy

Uncommonsense5 months ago5 months ago

Please vote NO!!! There is no question that teachers deserves a raise for the important job they do but this is not the answer. We are paying way more property tax already than we should. My dad lives in Northern Europe in a county well known for very high taxes, yet he is paying 1/4 of the property tax I am for a similar valued house. He could not believe it when I told him … Read More

Please vote NO!!! There is no question that teachers deserves a raise for the important job they do but this is not the answer. We are paying way more property tax already than we should. My dad lives in Northern Europe in a county well known for very high taxes, yet he is paying 1/4 of the property tax I am for a similar valued house. He could not believe it when I told him how much I have to pay here in LA County.

The problem is that the money we are paying is not going where it should and I have some “inside information” on the issue so I know what I am talking about. The people in charge of distributing the money are “pocketing it” themselves in the form of outrageous 6 figure salaries for jobs that they would only get paid a fraction for in the private industry. In addition to that they have 6 figure pensions which means they don’t even have to save for their own retirement. It is essentially a “bottomless pit” where if you give them more money it will simply “evaporate” into their pockets and little of it will trickle down to the teachers. This is why we need independent agencies investigating where the money goes and if it is being spent in a sensible manner.

Paul6 months ago6 months ago

We would lose our home as we are seniors living on Social Security only and have no extra monies to pay your parcel tax. Have you people no shame? You would force some seniors out of their homes!

John Fensterwald6 months ago6 months ago

Most parcel taxes I have seen have included an exemption for senior citizens, Paul. The proposed constitutional amendment would leave that as it is now, a local option.

Mike Napolitano6 months ago6 months ago

California has the highest student to teacher, and student to principal ratio's of any state in the nation.
State funding per pupil is well below the national average, while California arguably faces students with much greater needs. We have by far the highest percentage of students who are English language learners, and when the cost of housing is considered, perhaps the highest percentage of students in the nation who are coming from economic … Read More

California has the highest student to teacher, and student to principal ratio’s of any state in the nation.

State funding per pupil is well below the national average, while California arguably faces students with much greater needs. We have by far the highest percentage of students who are English language learners, and when the cost of housing is considered, perhaps the highest percentage of students in the nation who are coming from economic poverty.

We are a rich state and we can afford to do much better.

As a homeowner, life-long California resident who attended public schools form kindergarten through graduate school, I find it obscene that Proposition 13 has turned tax approval into an undemocratic process.

California cannot afford to continue its abysmal underfunding of schools. Let’s return to a democratic process for school parcel tax approval.

This is the time for the Legislature and governor to take a principled stand, adopt the proposed constitutional amendment and give voters a chance to decide.

Bill6 months ago6 months ago

Mike – What is an adequate level of school funding? Somebody is always going to be at the bottom of funding…School funding is now higher than ever, but the students still get only 180 days of instruction a year. Seems teaching is a part-time job, but the schools will never say they have sufficient funding regardless.

Arabella Houser6 months ago6 months ago

I have an issue with the fact that people who don’t own a home and have no idea how much it cost to keep it up, voting in favor that I have to pay more money so that school districts have more money to waste. There is no accountability as it is! When will it stop? They should start taxing people who rent their homes the same way as they tax property owners.

Richard Michael6 months ago6 months ago

Good article, in general, but ... there's always a but, isn't there?
Is talking to only one side is not a hallmark of journalism? Both Mr. Coleman and Mr. Fairbank are pro-taxes on any sort.
What you didn't mention is the use of surveys in connection with school measures that former AG Kamala Harris' opinion #13-304 asserts is a felony violation of the Education Code.
What you also didn't mention is the advocacy written into the actual ballot … Read More

Good article, in general, but … there’s always a but, isn’t there?

Is talking to only one side is not a hallmark of journalism? Both Mr. Coleman and Mr. Fairbank are pro-taxes on any sort.

What you didn’t mention is the use of surveys in connection with school measures that former AG Kamala Harris’ opinion #13-304 asserts is a felony violation of the Education Code.

What you also didn’t mention is the advocacy written into the actual ballot statements prepared by people like Mr. Fairbank and other advisors. For elections since January 1, 2018, the legislature has made this illegal through AB-195’s revision of Elections Code 13119. Printing and circulating ballots that do not conform to 13119 is a misdemeanor under Elections Code 18401.

So, we’ve got at least two crimes being ignored by districts, registrars, and the district attorneys who are charged with reining in public corruption.

And then, of course, there’s the “information” campaign advantage. The law for school districts is not the same as the law for cities and counties, which are under the Fair Political Practices Act.

Lastly, the 55% threshold for school bonds was supposed to come with accountability. There is none. Parcel taxes are even worse, because there is no restriction in any statute on what a school district can spend current revenue.

For example, Los Angeles Unified claims that the taxes will not be spent on pensions. Well, that’s just a bookkeeping entry. Cut the budget for teachers salaries and add it to the budget for pensions. Now the $5,000,000,000 in taxes is not being spent on pensions. It’s fraud.

When can we expect on article from you on any of these topics.

Here’s a link to the ballot statements for school parcel taxes for the past two years, which should have conformed to AB-195. Seeing is believing, not one ballot conforms to AB-195.

Anyone who thinks that an 85.7% passage rate demonstrates too much of a burden on school districts ignores the ubiquitous cheating by school districts and their advisors who reap huge profits from getting school measures passed.

tom6 months ago6 months ago

We heard from a local school board member that the Prop 13 changes for commercial real estate property tax won't generate very much additional revenue, so interesting that the discussion is going into local parcel taxes to generate the much needed funding for schools. Of course, that further exacerbates the problem of housing affordability in California. One of the these years the residents in California may rebel against the Legislature to stop … Read More

We heard from a local school board member that the Prop 13 changes for commercial real estate property tax won’t generate very much additional revenue, so interesting that the discussion is going into local parcel taxes to generate the much needed funding for schools. Of course, that further exacerbates the problem of housing affordability in California. One of the these years the residents in California may rebel against the Legislature to stop spending so much money on other things, but I’m not very hopeful given the last election. Bad enough that pensions are so greatly underfunded and with little change in sight.

Mike McMahon6 months ago6 months ago

I would be interested to know if the per square footage has cap on the amount of per square foot per parcel. Based on the description is seems there is no cap. So the larger commercial property owners would have a financial incentive to organize an opposition campaign against the parcel tax.